Keep Calm and Stick to the Plan!

It’s been a torrid start to 2016 in terms of stock market returns. The markets have had their worst start in years (worst start ever in some markets). However, Thursday 21st and Friday 22nd January saw some respite for investors with 2 consecutive days of significant increases. If you want to see the charts from the various days, you can follow me on twitter @CarlWidger and follow the Metis Ireland account also @MetisLifeLtd

When taken in isolation for a medium to long term investment plan, two days are largely irrelevant. However, they do demonstrate clearly one thing – that it’s time and not timing that make investment portfolios work for investors.

We had some discussions with investors during the week that wanted to ditch their strategy and “dash to cash”. We strongly advised against this course of action. Thankfully, all of our clients took our advice and remained invested. The problem with cashing out with a view to cashing back in is that you miss days like Thursday and Friday.

There are lots of studies done showing returns of investors who remained invested over a 5 year period versus those investors who tried to “time” the market and missed the best 5 & 10 days in performance. Without getting into specifics in this post (contact me if you want the reports), the results are staggering. The patient investor who stayed with his/her investment plan was handsomely rewarded.

So without question or any hesitancy, our advice is to “Stick With Your Plan”. All of our valued customers can rely on the following facts:

You committed for at least a 5 year time frame

You are invested in an investment portfolio that suits your investment risk profile

You are invested in a diversified portfolio

You are not taking unnecessary risk

Nobody knows how are markets are likely to perform in the short term, but history tells us long term investment pays off

If you would like to discuss the Metis Ireland approach to advising clients in the minefield of investment portfolios, please contact me on 061 518365.